PGCIL gets 5 directors; way cleared for IPO

The government today appointed five independent directors on the board of transmission major Power Grid Corporation of India Ltd (PGCIL), clearing the way for the company's stalled initial public offer (IPO).

The company is expected to raise about Rs 1,500-2,000 crore through the offer, which will be used to fund its expansion plans.

PGCIL has planned an investment of Rs 6,500 crore in the current fiscal and an investment of Rs 55,000 crore in the Eleventh Plan period (2007-2012). Over the next five years, the company plans to increase the capacity of its inter-regional power transmission capacity to 37,000 Mw from about 12,000 Mw at present.

The government-owned transmission company was planning to hit the market last month but could not, due to the absence of the requisite number of independent directors on its board. "The long wait is over. We are now compliant with Sebi norms," said a company executive, who did not want to be named.

While the total requirement is for seven independent directors, the official said "five directors are sufficient for the IPO process". The company has 12 directors in all now, of which two are government nominees.

"We are ready and once Sebi gives the clearance, we will hit the market," he added.

The company will issue 10 per cent fresh equity in the market with each share carrying a face value Rs 10 while the government will sell 5 per cent stake in the corporation, which has a paid-up capital of Rs 3,800 crore.

The proceeds from the 10 per cent fresh equity would be retained by the company to part-finance upcoming projects. A portion of the proceeds from the 5 per cent disinvestment will go to the government, and a portion will be retained by the company.

The newly appointed directors are PK Shetty, Fellow and head of administration, National Institute of Advanced Studies, Bangalore, MS Kapur, former CMD, Vijaya Bank, AS Narang, dean, Faculty of Management Studies, Delhi University, Anil Agarwal, former president, Assocham, FA Vandravala, former MD, Tata Power Company.